Lex Machina’s First Annual Insurance Litigation Report Reveals Distinct Case Filing Trends
The Insurance Litigation report showcases data and trends involving disputes between an insurer and a policyholder, a beneficiary, or another insurer asserting the rights of a policyholder. The report includes analytics from both the broad Insurance data set as well as five common insurance types: Automobile, Homeowners, Life, Uninsured/Underinsured Motorists (UM/UIM) and Business Liability.
The report shows that insurance case filings have remained relatively steady from 2009 to 2017 (down 8.6%), while certain policy types showed distinct filing trends:
- Automobile case filings increased 39% during this time period while UM/UIM filings doubled. These increases are likely due to increasing medical costs related to these claims, which enabled them to meet Federal Court jurisdictional requirements.
- Cases involving homeowner insurance claims fluctuated widely during 2009 to 2017, with large peaks caused by hurricanes Ike (2008) and Sandy (2013). However, even when hurricane-related claims are removed, non-hurricane related homeowner case filings grew more than 90% in this time period.
- Life insurance policy claims decreased substantially (20%) during this period, despite a 14% increase in 2017.
- Other case filings (outside of those mentioned above), including commercial property, disability, long-term care, and other types of specialty coverage, increased by nearly 25% since 2009.
The data also showed that findings and case resolutions undoubtedly favor insurers, with defendants gaining favorable judgments in 80% of cases relating to the insurer's Duty to Defend, 85% of cases involving Duty to Indemnify, and more than 90% in cases relating to Bad Faith. Findings of Bad Faith are very rare, but when they do occur, they do not correlate with a windfall of damages. In looking at damages awards in cases with findings of Bad Faith from 2009 to Q2 of 2018, the damage awards in these cases fluctuate widely with no evident upward or downward trend.
In life insurance cases, defendants prevailed nearly five times more than claimants (11.5% vs. 2.4%), with two-thirds of claim defendant wins occurring at summary judgement. In business liability cases, only about 20% cases resulted in a decision on the merits, with claim defendants prevailing three times more often than claimants (15% vs. 5%). However, in cases that went to trial, claimants prevailed more than 55% of the time.
"The insurance industry has long relied on data analytics to evaluate risks, establish premiums, and evaluate performance. It is fitting that data analytics is now available for insurance litigation," said
The report notes that four of the top five jurisdictions with the highest number of insurance cases are in
In addition, the report also compares variations in insurance case timings in four major metropolitan areas: the
To request a copy of the full report, please register here: http://pages.lexmachina.com/Email_Insurance-Report-2018_LP-banner.html.
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